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My Dre - Google Google Inbox (1100 - Solarg. Mal solarga LALU LIISILLE Manipal Internation Google Scholar Section Continued) 03. (a) On Dec 16, CIMX
My Dre - Google Google Inbox (1100 - Solarg. Mal solarga LALU LIISILLE Manipal Internation Google Scholar Section Continued) 03. (a) On Dec 16, CIMX makes a lycar loan a RM15 million with interest paid quarterly at KLIROR. To protect against failing interest rate, CIMX buys an interest rate floor with an exercise rate of 8% for a premium RM30,000. The interest payment on the loan and the payoff of floor are based on the exact number of day and assume 360-day year. If the KLIBOR at December 16 7.875%, March 16- 8.25% June 16.7.125% September 15 - 6% 6) Determine the cash flows for CIMX. (Required: Present your answer on tabular format and round your answer to the nearest unit (14 marks) (1) Calculate the effective annual rate with floor and without floor. (4 marks) (b) What are the limitation of duration on bonds portfolio Management? How the Value at Risk (VaR) overcome the problem of using duration to manage the bonds portfolio. Explain your answer. (12 marks) [Total: 30 marks] My Dre - Google Google Inbox (1100 - Solarg. Mal solarga LALU LIISILLE Manipal Internation Google Scholar Section Continued) 03. (a) On Dec 16, CIMX makes a lycar loan a RM15 million with interest paid quarterly at KLIROR. To protect against failing interest rate, CIMX buys an interest rate floor with an exercise rate of 8% for a premium RM30,000. The interest payment on the loan and the payoff of floor are based on the exact number of day and assume 360-day year. If the KLIBOR at December 16 7.875%, March 16- 8.25% June 16.7.125% September 15 - 6% 6) Determine the cash flows for CIMX. (Required: Present your answer on tabular format and round your answer to the nearest unit (14 marks) (1) Calculate the effective annual rate with floor and without floor. (4 marks) (b) What are the limitation of duration on bonds portfolio Management? How the Value at Risk (VaR) overcome the problem of using duration to manage the bonds portfolio. Explain your answer. (12 marks) [Total: 30 marks]
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